Litigation Release No. 16948 / March 30, 2001

Montedison, S.p.A., an Italian company whose senior management at the time fraudulently overstated company income by at least $398 million through early 1993, was ordered by the U.S. District Court for the District of Columbia to pay a civil penalty of $300,000 for violating the antifraud, financial reporting and books and records provisions of the U.S. federal securities laws. The order was the result of a settlement between the Commission and Montedison in which Montedison neither admitted nor denied liability for the allegations in the complaint. The Commission filed the complaint in 1996.

The Commission complaint alleged that Montedison disguised hundreds of millions of dollars in payments that, among other things, were used to bribe politicians in Italy and other persons. The fraudulent conduct was disclosed only after new management was appointed when Montedison disclosed it was unable to service its bank debt. Virtually all of the former senior management at Montedison responsible for the fraud were convicted by Italian criminal authorities and were sued by the company.

Montedison, which was an Italian corporation with headquarters in Milan, had interests in the agro-industry, chemicals, energy and engineering sectors. Until late 2000, American Depositary Receipts ("ADRs") were listed on the New York Stock Exchange. Montedison was required to file reports with the Commission pursuant to Section 13(a) of the Exchange Act, including annual reports on Form 20-F.

Montedison was acquired by Compart, S.p.A., in late 2000 and its ADRs were delisted. Compart then changed its name to Montedison. No securities of Compart are listed for sale by U.S. stock exchanges. Compart, which agreed to the settlement on behalf of the former Montedison, was not a defendant in the Commission's complaint.